Now Reading: India’s forex reserves hit record $729.33 billion on FCNR inflows
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India’s forex reserves hit record $729.33 billion on FCNR inflows
India's foreign exchange reserves rose to an all-time high of $729.328 billion in the week ended August 21, 2026, a jump of $12.422 billion from the previous week, driven by strong inflows…
India's foreign exchange reserves rose to an all-time high of $729.328 billion in the week ended August 21, 2026, a jump of $12.422 billion from the previous week, driven by strong inflows into foreign currency non-resident (bank) deposits under a limited-period RBI swap facility.
The previous record was $728.494 billion in late February 2026. Since end-March 2026, reserves have risen by $38.221 billion. The RBI ended the concessional swap facility early on August 31, 2026, instead of September 30, spurring inflows. Between June 8 and August 21, FCNR (B) deposits rose by $65.397 billion.
Economists said the increase strengthens India's external buffer but cautioned that deposit-led inflows raise external liabilities and may reverse when incentives expire. The RBI absorbed most dollars into reserves rather than letting them appreciate the rupee.
Indian Opinion Analysis
The RBI's early closure of the swap window suggests it believes enough reserves have been built for now. The central bank has used such facilities before, notably in 2013 and 2022, to stabilise the rupee during volatility. What matters next is the quality of the reserve build-up: once the window shuts on August 31, the pace of accretion will slow sharply. If global yields rise or the rupee comes under pressure again, the RBI may have to deploy these reserves rather than accumulate more. The next weekly data release will show whether the pre-closure surge exhausted itself or continued into the final days.
Source: thehindubusinessline.com
This brief was synthesised by AI from the source linked above.
